PhilSeven profit rises 12% to R1.32 billion after store expansion
Philippine Seven Corporation, owner of the country’s largest convenience store chain, reported a 12.1 percent hike in net income to R1.32 billion last year from R1.18 billion in 2016.
In a disclosure to the Philippine Stock Exchange, the firm said full year profit was boosted by net income in the fourth quarter which surged 25.8 percent to R669.6 million from R532.1 million in 2016.
Same store sales grew by 3.7 percent during the fourth quarter driven by new product launches and improved assortment. The year started with a 4.4 percent decline in same store sales in the first quarter brought about by high base year effect.
Sales started to improve in the second and third quarter by posting growth of 1.2 percent and 4.1 percent, respectively.
Retail sales of all stores went up by 18.2 percent to R37.5 billion from R31.8 billion a year ago. This was mainly driven by the increase in the number of operating stores.
PhilSeven President Jose Victor Paterno said “2017 was far from our best year in terms of both same store sales growth and new store openings. The latter was a deliberate profittaking move in response to reduced competitive activity, resulting in higher average new store sales, and the former due to high base effects in 2016.”
“We had initially relied on an increase in SKU count to increase sales, but it failed to deliver as much as hoped,” he said.
Paterno added that, “the bright side to all this is that in our struggle to improve sales for the year, we ended up laying the foundation for same store sales growth in the future by running experiments on assortment and looking deeper into pricing, as well as expanding new lines like coffee and fried chicken.”
For this year, the company will be setting its capital expenditures budget to at least R3.5 billion to support its store expansion strategy. Bulk of the said amount is allocated to new store opening, store renovation and equipment acquisition in line with new product launches. (JAL)